International Marketing-Introducing DHL in Canada - Essay Example

International Marketing-Introducing DHL in Canada Introduction Being the second largest country in the world, Canada has benefited from undisturbed economic growth for the past one decade which puts it to the world’s second largest country to a spot among the G8 nations (Stephenson, 2012). Canada’s economy’s mostly benefits from the US financial system, with which it is directly linked. Introduction of a new business venture like DHL will be a great opportunity for Canada’s economy to even prosper to greater heights and compete with other G8 countries at a more advantaged position. Canada has fat corporate profits, elevated raw material prices and high capability utilization which have the tendency of boosting business investments for years. Canada also have an advantage of a good consumer behavior which creates an optimistic mood this is with a low unemployment take for more than three decades and the lessening of value added tax from 7% to 6% which proves that Canadians still have the propensity to buy (Stephenson, 2012). For a new company like DHL, the above conditions are most appropriate for positioning itself in the Canadian market so as to beat the competition. Canadian people are also loyal to a brand which is important for the DHL marketing strategies. The first impression of the company, their services and products will determine the future of the company in Canada. Market Entry Strategy The market entry strategy is essential to any organization that is plannig to penetrate a new location; thus, the strategy chosen should be performed with care after the acquirement of the relevant information that will alter the company’s mode of entry (Czinkota & Ronkainen, 2004). There are a number of things that should be considered when choosing an appropriate entry strategy, some of these factors include: Infrastructure: The infrastructure that is set in place will play a big part in determining the mode of delivery and distribution that will be chosen by the organization. Infrastructure, such as roads, railway lines and airports, will be essential in the consideration of the best way to deliver the goods or services that the company has to offer their target market. Cost: The cost of the various available delivery methods will also come into consideration when considering the best method to be used. The organization has to consider what mode of delivery will not be only be the cheapest to use, but effective as well. Sometimes the cheapest method available is not the most viable option as it could also be the slowest as well (Lymbersky, 2008). In reference to the entry of DHL into the Canadian market, the best market strategy would be a combination of more than one means of delivery so as to serve the various needs of their prospective customers in the most cost effective way. This includes the use of road, rail and air transport depending on the various factors affecting the delivery, such as the urgency of the package that needs to be delivered, the value of the package, its nature and the distance that needs to be traveled. For instance, the delivery of a perishable product such as food items or flowers that need to cover a large amount of distance in a short period of time will mean that the best means of delivery will be via air transport so as to make the delivery in the shortest time possible ensuring that it does not spoil/wither on the way there. Items that are not perishable and have no particular hurry in terms of the time should arrive at their destination using rail or road transportation since they take a longer time but cost less. However, items of value may also require air transport as airports have more security than the other alternatives which reduces the risk of theft while in transition (Stanley & John, 2008). A combination of all modes of transport ensures that the company is not left at a loss when urgent demands are made by their clients; this also allows the organization to offer a variety of packages from which the customer is able to choose according to their particular needs. The existence of different packages on offer is also an essential factor in the business as it provides an availability of choice for potential clients who wish to use DHL’s services; this puts the company in a better position of meeting the demands of their various clientele which will be important in attracting potential customers who are looking for delivery services (Czinkota & Ronkainen, 2004). The Nature of Canada’s Infrastructure and How This Might Affect Your Chosen Distribution Strategy The nature of Canada’s infrastructure will also play an essential part in the ability of DHL to provide their services on offer efficiently. Thus, when planning to enter this particular market the organization has to ensure that their chosen market entry strategies can be adequately provided for by the infrastructure that has been put in place in the country (Czinkota & Ronkainen, 2004). Luckily for DHL in this case, the infrastructure that is available in Canada is more than adequate enough to provide the services that the business plans to offer to their clients. The availability of a well maintained and quality road network ensures that parcels to be delivered by road will not encounter any complications on transit. The road network allows for easy access to almost every part of the country and consists of well-maintained highways and smaller in routes that access the various neighborhoods and towns in the country. The maintenance of the roads is important as the delivery of sensitive packages, such as glass items, via poor roads filled with pot holes and irregular surfaces may lead to the destruction of such items; thus, the company may be forced to use alternative methods to deliver such goods, which may be more expensive than the cost transferred onto the consumer via pricing. This may lead to staying away of some potential customers. The rail network is also expansive as well allowing for the provision of this type of transport for individuals who may choose it as their preferred mode of delivery. The various railway stations around the country also allow the company to combine this mode of delivery with the others: for instance, one may send the package first via train to be picked up at a particular station while the journey can continue via roads which could appear cheaper than having someone drive all the way to the destination saving on fuel costs (Sak & John, 2004). The airports around Canada provide a quick and safe mode of transport to any part of the country; they provide a fast and efficient means of delivery for clients willing to pay a little extra for the services. The sufficient security that is provided by the government at the airports also means that the company does not have to suffer the extra costs of sending an individual with the parcel that is in transit, and an employee can simply show up to pick it up at its destination point which saves labor costs as well as travel expenses. The multiple airports and official landing strips around the country also mean that the company is able to offer this type of service (air delivery) for any destination that may be required by a client ensuring that one does not risk disappointing a client who may want this particular mode of service for their parcel. The adequate maintenance of this infrastructure is also an added advantage as the organization does not have to worry about them breaking down in quality over the years (Czinkota & Ronkainen, 2004). Existing Competition, both Direct and Indirect Competition is a factor that every business organization has to consider when entering into a new market and it is no different with The DHL delivery service. There are a number of factors that should be considered when the organization is studying the existence of competition in the market they are about to enter. Leading these factors is the existence of both direct and indirect competition that is present in the market. Direct competition refers to the other companies that are present in the region offering similar service to that of the organization while indirect competition refers to the various alternatives that may be available to potential clients instead. Both types play a big role in the level of monopoly that the company will be able to attain in the market and thus have to be studied to determine methods of countering their influence (Svend, 2011). The direct competition will include local companies offering similar delivery and the government-run postal services that have been present since time in memorial. When dealing with the local companies, the organization may choose to fight for the target market on two fronts that have a large influence on service potential clients. The first is the quality of the services offered. Potential clients will prefer the delivery company with the best services: this may include the efficiency with which the package is delivered, the handling and care of the package while its transit and even the courtesy of the couriers placed in charge of making the delivery (Czinkota & Ronkainen, 2004). Offering better quality is a good way of ensuring that consumers opt for your services and not the competitor’s. Another front is the cost of the services: potential clients will look at the most affordable prices on offer while choosing which deliver service to use; thus, having lower prices is an effective means of attracting new customers. Dealing with indirect competitors is a bit more difficult than with the direct ones since they are not exactly offering the same services and thus are harder to handle. The best method of dealing with them is through marketing and promotion strategies. The company should set out a full flag initiative advertising to potential clients, putting emphasis on the advantages of using their services instead of other available offers so as to attract customers from these alternatives to their services (Czinkota & Ronkainen, 2004). Though it is never wise to directly attack the competition as this will be seen as the act of aggression and may not be appreciated by the clientele, the company can indiscreetly point out why it is better to use their services instead of other available options existing in the market. For example, one may point out that the company offers better security compared to other modes of delivery available without exactly mentioning what those other modes are (Czinkota & Ronkainen, 2004). Proposed Communication Strategies In Light Of the Market Conditions The communication strategies that will be utilized by the company are also very essential for the success that the organization will be able to attain. Proper communication is essential for a numerous reasons with the most important being the creation of awareness of the company’s services to the potential clients existing in the market (Czinkota & Ronkainen, 2004). If clients are not aware of the services on offer, they will not turn to the organization for their delivery needs. There are a number of factors that the company must take into consideration when delivering a message to the market include the sender, the message, the receiver and the medium/channel that will be used in this process. The sender refers to the company itself, and the organization has to ensure that it builds up its attractive image in the public eye. This will make them more receptive to any message that they have to give; thus, they will be willing to listen to when it is delivered. The receiver refers to the target market, and one has to ascertain that the message being delivered has been designed to attract the potential clients (Czinkota & Ronkainen, 2004). This is done by finding out what clients are looking for in a delivery service and communicating. The message itself must be attractive enough to capture the interest of the audience; the channels of delivery should be the ones used most by the target audience that the company is after (Joshi, 2005). When developing the communication strategy implemented in the market, one has to consider the particular promotion mix that will be most effective in their bid to create awareness about their services. The proper mix is essential to the success of the communication strategy put in place; it includes various activities that are combined for the best effect on the target market possible. In relation to DHL, a good promotional mix includes activities such as advertising, which is a quick way of creating awareness of the organization and the services it has to offer via various forms of media available. These include TV, radio and print media (newspapers, journals and magazines). This can be combined with person to person communication, which can be achieved by encouraging clients who are happy with the services they have received from the company to tell their friends and acquaintances about their experience (Joshi, 2005). Advertising can be added to sales promotion accomplished by activities such as offering discounts on various packages on offer or sale initiated competitions that could offer various prizes to clients who use the company’s services (Roy, 2004). The hosting/sponsoring of various events also serve as a good way of creating awareness of the company’s services; thus, it can be added to the mix as well. This may involve popular existing events or the launch of a new event hosted by the company. A combination of the various tactics will ensure that the communication strategy is effective. But this should be a continued process since the company cannot perform these tasks just once and expect them to have ever lasting results. 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M., 2005, International Marketing, Oxford University Press, New Delhi and New York. Read More